One of the primary reasons for using cost variances is:
A)they diagnose the cause of a problem and what should be done to correct it
B)for superiors to communicate expectations to lower-level employees
C)to administer appropriate disciplinary action
D)for financial control of operating activities and understanding why variances arise

Question

Quizplus · Accepted Answer

Cost variances are used for financial control of operating activities and understanding why variances arise. They help organizations identify areas where actual costs differ from planned or standard costs and help organizations take corrective actions to improve their financial performance. Cost variances can be used as a tool for continuous improvement and cost reduction. Options A, B, and C are not the primary reasons for using cost variances.

One of the Primary Reasons for Using Cost Variances Is